CHAPTER – 1

INTRODUCTION

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1 INTRODUCTION

The financial statement provides the basic data for financial performance analysis. The

financial statements provide a summarized view of the financial position and operations of a

firm. Financial analysis (also referred to as financial statement analysis or accounting analysis)

refers to an assessment of the viability, stability and profitability of a business. The analyst first

identifies the information relevant to the decision under consideration from the total information

contained in the financial statements. Therefore, much can be learnt about a firm from a careful

examination of its financial statements as invaluable documents and performance reports.

The analysis of financial statements is an important aid to financial analysis. They

provide information on how the firm has performed in the past and what is its current financial

position. Financial analysis is the process of identifying the financial strengths and weakness of

the firm from the available accounting data and financial statements. The analysis is done by

establishing relationship between the different items of financial statements.

The focus of financial analysis is on key figures in the financial statements and the

significant relationship that exists between them. The analysis of financial statements is a process

of evaluating relationship between component parts of financial statements to obtain a better

understanding of the firm’s position and performance.

The first task of financial analyst is to select the information relevant to the decision

under consideration from the total information contained in the financial statement. The second

step involved in financial analysis is to arrange the information in a way to highlight significant

relationships. The final step is interpretation and drawing of inferences and conclusions. In brief,

financial analysis is the process of selection, relation, and evaluation.

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1.1 INDUSTRIAL PROFILE

1.1.1 NON-BANKING FINANCIAL COMPANIES (NBFCS)

Non-bank financial companies (NBFCs) are financial institutions that provide

banking services without meeting the legal definition of a bank, i.e. one that does not hold a

banking license. Operations are, regardless of this, still exercised under bank regulation.

According to Reserve Bank Amendment of Act 1997, A Non-Banding Financial Company

(NBFCs) means,

A financial institution which is a company

A non-banking institution which is a company which has its principal business receiving

of deposits under any scheme of arrangement or in any other manner or lending in any

manner

The non-banking financial sector in India has tremendous growth in recent years. NBFCs’

attracted a large number of small investors since the rate of return on deposits with them was

relatively high. NBFCs are quite flexible sectors like equipment leasing, hire-purchase, housing

finance, consumer finance and so on, where gaps between the demand and supply of funds have

been high. The growth in number of NBFCs was facilitated by the case of entry, limited fixed

assets and absence of any need to hold inventories.

1.1.2 CURRENT SCENARIO OF NBFCS

The base of today’s feebleness of Non-Banking Finance Companies can perhaps be

traced back to early nineties. The buoyant capital market, in the first flush liberalization

welcomed every issue with huge premiums and massive over subscription. This was the signal

for several unscrupulous promoters to set up high profile finance companies and raise money

from both the capital markets and through public deposits.

The Reserve Bank of India for its past, progressively relaxed its regulatory hold over

the industry and made it possible for the companies with little financial strength and even fewer

scrupulous to raise large amounts of money from an unsuspecting public. Hardly anyone knew

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or questioned how these moneys were deployed. Soon afterward, the stock market scam broke

claiming its first victim from the non-banking finance companies sector. With the capital market

in disarray, it was no longer possible for continue of fund flow, from investors who had burnt

their fingers in the stock markets. It was thus convenient fresh deposits. In July1996, the RBI,

perhaps the most sweeping changes in the non-banking finance companies regulation, virtually

pulled out all the stock, enabling companies to raise deposits with minimum number and more

significantly, removed the ceiling on interest rate.

At the point, when the government was faced with grim situation and responding to the

plea of the industry, the government set up a special task force headed by Mr. C.M. Vasudev to

recommend the steps for the orderly growth of finance companies while keeping investor

protection as its key priority. The committee in its final report recognized the important role

played by these companies and warned against the tendencies to tar all the companies with the

same brush. The silent recommendations of the Vasudev committee were

Review of minimum capital requirement of Rs. 25lakhs for registration purposes

Higher capital adequacy ratio for non-banking finance companies seeking public deposits

without credit rating

Preview of prudential norms with ceiling for exposure to real estate and capital markets

Differential ceiling on public deposit acceptance for companies with and without credit

ratings

A separate instrument to regulate and supervise non-banking finance companies.

1.1.3 ADVANTAGE OF NBFCs

1. Lower transaction costs

2. Higher rate of interest on deposits compared to banks

3. Quick financial decision caking

4. Customer orientation

5. Prompt provision of services

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1.1.4 RBI GUIDELINES FOR NBFCs

The nineties witnessed a dramatic increase in the number of NBFCs and it was thought

necessary to have a regulatory framework for NBFCs. RBI came out with set of guidelines for

NBFCs specifically aimed at protecting the depositors.

To encourage the NBFCs that is running on sound business principals, on July 24th

1996, NBFCs were divided into two classes,

i. Equipment leasing and hire purchase (finance company)

ii. Loan and investment companies

1.1.5 CATEGORIES OF NBFCs

i. Loan Companies

ii. Investment Companies

iii. Hire Purchase Companies

iv. Equipment Leasing Companies

v. Mutual Benefits Finance Companies

vi. Housing Finance Companies

Equipment leasing company – Any company, which is a financial institution, carrying on its

principal business. The activities of leasing of equipment of the financing of such activity.

1. Hire purchase finance company – A company, which is a financial institution, carrying

on its principal business, hire purchase transaction.

2. Investment Company – A company, which deals with acquisition of securities.

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3. Loan Company – A company, which is a financial institution and carries on its principal

business of providing finance by any activities other than its own.

4. Mutual benefit finance company – A company, which is a financial institution. This is

notified by the central government under section 620 (a) of The Companies Act 1956.

1.2 COMPANY PROFILE

Sundaram Finance Limited was incorporated in 1954 and has grown into one of the

most trusted financial services group in India and a part of TV Sundaram Iyengar and Sons group

of companies, one of India’s largest industrial conglomerates and diversified industrial

conglomerate with principal base in Chennai and Madurai. Almost all the companies in the

group are privately held. The company was started with a paid-up capital of Rs.2Lakhs and

later went public in 1972.

1.2.1 FOUNDER OF THE COMPANY

The Company was founded by Sri. T. S. Santhanam. He has a rich experience in the

automobile and road transport sector for nearly six decades. He was the founder, Director and

First managing director of Sundaram Finance Limited and has served on various committees

constituted by the Central Government and Reserve Bank of India on various aspects relating to

growth and development of the Road Transport and Non-Banking Financial Companies.

The company has been rated as ‘MAA’ by the ICRA signifying the highest number of

deposits. The Company mobilizes its funds from driver sources at competitive rates thus

achieving a reduction in overall cost of funds. The company gets its funds from the main sources

namely,

Deposits

Bank/Industrial Finance

Debentures

Commercial Papers

1.2.2 THE MAIN ACTIVITIES OF SUNDARAM FINANCE LIMITED

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Deposits

Hire Purchasing

Leasing

1.2.3 FIVE PILLARS OF SUNDARAM FINANCE LIMITED

1. Faith

2. Depositor’s confidence

3. Institutional trust

4. Investor safety

5. Employee loyalty

1.2.4 CORPORATE PHILOSOPHY OF THE COMPANY

Truth and fairness guide the management of finance

Customer satisfaction through excellent service and reliability

Prudence and conservation in finance operations

Truth, honesty and efficiency in all dealings

Professional management with high standards of integrity

Full compliance with law and regulations.

1.2.5 OBJECTIVES OF THE COMPANY           

          Sundaram Finance was initiated with the sole objective of financing commercial

vehicles and passenger cars. Within a span of 55 years they have spread their wings to every

exposable area in the Non-banking finance sector. Sundaram Finance – Where Truth, Fairness

and Transparency guide the management of finance. 

1.2.6 VALUES        

         A set of values have governed their growth over the years. Among them are transparent

in their business practices, dedicated customer service fair, efficient and safe financial policies.

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1.2.7 STRENGTH

Support of the group companies.

Involvement of the directors on major policy matters.

High employee morale.

Good initial system for operation and control.

Efficiency and sophisticated software system for decision support system.

Investor’s trust and faith in the company.

Easy financing schemes for all cars – new and second hand cars.

Simple documentation, quick processing and speedy approval.

Customized schemes, personalized service.

Direct dealing between customer and company.

No hidden costs.

Tailor – made products to suit individual requirements.

1.2.8 SUBSIDARIES / GROUPS

Sundaram Finance

Sundaram BNP Paribas Asset Management

Sundaram BNP Paribas Home Finance Limited

Royal Sundaram Alliance Insurance

Sundaram InfoTech Solutions

Sundaram Business Services

Sundaram Finance Distribution Limited

Infrieght Logistics Solutions Limited

1.2.9 AWARDS RECEIVED

‘Certificate of Commendation’ award by the Government of India under the scheme of “Good Tax Payers”. 

“Second Best Tax Payer” in the category of Private Sector Company for Assessment Year 1994-95 in Tamil Nadu Region, from the Income Tax Department, Tamil Nadu. 

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‘Rolling Trophy’ by Rotary Club of Madras South West for Best Employer-Employee Relationship for the year 1995-96. 

“Best Tax Payer” in the category of Private Sector Company for Assessment Year 1995-96 in Tamil Nadu Region, from the Income Tax Department, Tamil Nadu. 

“Automan Award” to Shri T S Santhanam, Chairman, from Motor India in 1998. 

“Pioneering Service Award” to Shri T S Santhanam Chairman, from Chennai Good Transport Association. 

“Sarige Ratna Award” to Shri T S Santhanam, Chairman, from the Bangalore City Lorry Transporting Agents’ Association (Regd). 

“Most Valued Customer Award” to Shri T S Santhanam Chairman, from the State Bank of India. 

“The Best Financier of the New Millennium 2000” to Shri. G K Raman, Managing Director, from the All India Motor Transport Congress.

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NEED, OBJECTIVES AND SCOPE OF THE STUDY

2.1 NEED FOR THE STUDY

The Financial Statements are mirror which reflects the financial position and strengths or

weakness of the concern. The Non- Banking Financial Company has been witnessed intense

competition from domestic banks and international banks. Every business needs to view the

financial performance analysis.

The study on effectiveness of operational and financial performance of Sundaram finance

limited is conducted to measure the overall performance of company. The financial analysis

strengths the firms to make their best use, and to be able to spot out financial weakness of the

firm to state suitable corrective actions.

This study aims at analyzing the overall financial performance of the company by using

various financial tools like Comparative Analysis, common size statement analysis, Ratio

Analysis, and Cash Flow Analysis.

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2.2 OBJECTIVES OF THE STUDY

2.2.1 PRIMARY OBJECTIVE:

o To study the financial performance analysis of Sundaram Finance Limited,

Chennai.

2.2.2 SECONDARY OBJECTIVES:

o To compare and analyze the financial statements for the past three financial years

(2008,2009 and 2010)

o To know the profitability, liquidity and solvency position of Sundaram finance

limited.

o To compare and interpret financial statements of the Sundaram Finance Limited

with comparative and common-size statement analysis.

o To forecast the annual growth rate of income of the company with the help of

regression analysis.

o To provide suggestions for improving the overall finance performance of the

company.

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2.3 SCOPE OF THE STUDY

The study is based on the accounting information of the SUNDARAM FINANCE

LIMITED, CHENNAI. The study covers the period of 2008-2010 for analyzing the financial

statement such as income statements and balance sheet.

The scope of the study involves the various factors that affect the financial efficiency

of the company. To increase the profit and sales growth of the company. This study finds out the

operational efficiency of the organization and allocation of resources to improve the efficiency of

the organization.

The data of the past three years are taken into account for the study. The performance

is compared within those periods. This study finds out the areas where Sundaram Finance Ltd

can improve to increase the efficiency of its assets and funds employed.

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CHAPTER – 3LITERATURE

REVIEW

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3 LITERATURE REVIEW

3.1 REVIEW OF LITERATURE

Literature Review was done by referring previous studies, articles and books to know

the areas of study and analyze the gap or study not done so far. There are various studies were

conducted relating to operational performance of the company from which most relevant

literatures were reviewed.

Kennedy and Muller (1999), has explained that “The analysis and interpretation of financial

statements are an attempt to determine the significance and meaning of financial statements data

so that the forecast may be made of the prospects for future earnings, ability to pay interest and

debt maturines (both current and long term) and profitability and sound dividend policy.”

T.S.Reddy and Y. Hari Prasad Reddy (2009), have stated that “The statement disclosing status

of investments is known as balance sheet and the statement showing the result is known as profit

and loss account”

Peeler J. Patsula (2006), he define that a sound business analysis tells others a lot about good

sense and understanding of the difficulties that a company will face. We have to make sure that

people know exactly how we arrived to the final financial positions. We have to show the

calculation but we have to avoid anything that is too mathematical. A business performance

analysis indicates the further growth and the expansion. It gives a physiological advantage to the

employees and also a planning advantage.

I.M.Pandey (2007), had stated that the financial statements contain information about the

financial consequences and sources and uses of financial resources, one should be able to say

whether the financial condition of a firm is good or bad; whether it is improving or deteriorating.

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One can relate the financial variables given in financial statements in a meaningful way which

will suggest the actions which one may have to initiate to improve the firm’s financial condition.

Chidambaram Rameshkumar & Dr. N. Anbumani (2006), he argue that Ratio Analysis

enables the business owner/manager to spot trends in a business and to compare its performance

and condition with the average performance of similar businesses in the same

industry. To do this compare your ratios with the average of businesses similar to yours and

compare your own ratios for several successive years, watching especially for any unfavorable

trends that may be starting. Ratio analysis may provide the all-important early warning

indications that allow you to solve your business problems before your business is destroyed by

them.

Jae K.Shim & Joel G.Siegel (1999), had explained that the financial statement of an enterprise

present the raw data of its assets, liabilities and equities in the balance sheet and its revenue and

expenses in the income statement. Without subjecting these to data analysis, many fallacious

conclusions might be drawn concerning the financial condition of the enterprise. Financial

statement analysis is undertaken by creditors, investors and other financial statement users in

order to determine the credit worthiness and earning potential of an entity.

Susan Ward (2008), emphasis that financial analysis using ratios between key values help

investors cope with the massive amount of numbers in company financial statements. For

example, they can compute the percentage of net profit a company is generating on the funds it

has deployed. All other things remaining the same, a company that earns a higher percentage of

profit compared to other companies is a better investment option.

M Y Khan & P K Jain (2011), have explained that the Financial statements provide a

summarized view of the financial position and operations of a firm. Therefore, much can be

learnt about a firm from a careful examination of its financial statements as invaluable

documents / performance reports. The analysis of financial statements is, thus, an important aid

to financial analysis.

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Elizabeth Duncan and Elliott (2004), had stated that the paper in the title of efficiency,

customer service and financing performance among Australian financial institutions showed that

all financial performance measures as interest margin, return on assets, and capital adequacy are

positively correlated with customer service quality scores.

Jonas Elmerraji (2005), tries to say that ratios can be an invaluable tool for making an

investment decision. Even so, many new investors would rather leave their decisions to fate than

try to deal with the intimidation of financial ratios. The truth is that ratios aren't that intimidating,

even if you don't have a degree in business or finance. Using ratios to make informed decisions

about an investment makes a lot of sense, once you know how use them.

Carlos Correia (2007), had explained that any analysis of the firm, whether by management,

investors, or other interested parties, must include an examination of the company’s financial

data. The most obvious and readily available source of this information is the firm’s annual

report. The financial statements shall, in conformity with generally accepted accounting practice,

fairly present the state of the affairs of the company and the results of operations for the financial

year.

Greninger et al.(1996), identified and refined financial ratios using a Delphi study in the areas

of liquidity, savings, asset allocation, inflation protection, tax burden, housing expenses and,

insolvency. Based on the Delphi findings, they proposed a profile of financial well-being for the

typical family and individual.

Rachchh Minaxi A (2011), have suggested that the financial statement analysis involves

analyzing the financial statements to extract information that can facilitate decision making. It is

the process of evaluating the relationship between component parts of the financial statements to

obtain a better understanding of an entity’s position and performance.

Salmi, T. and T. Martikainen (1994), in his "A review of the theoretical and empirical basis of

financial ratio analysis", has suggested that A systematic framework of financial statement

analysis along with the observed separate research trends might be useful for furthering the

development of research. If the research results in financial ratio analysis are to be useful for the

decision makers, the results must be theoretically consistent and empirically generalizable.

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John J.Wild, K.R.Subramanyam & Robert F.Halsey (2006), have said that the financial

statement analysis is the application of analytical tools and techniques to general-purpose

financial statements and related data to derive estimates and inferences useful in business

analysis. Financial statement analysis reduces reliance on hunches, guesses, and intuition for

business decisions. It decreases the uncertainty of business analysis.

CHAPTER – 4

RESEARCH METHODOLOGY

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4. RESEARCH METHODOLOGY

Research can be defined as “A Scientific and Systemic Search for pertinent

information on a specific topic”. Therefore, research could be understood as an organized

activity with specific objectives on a problem or issues supported by compilation of related data

and facts, involving application of relevant tools of analysis and deriving logically on originality.

4.1 RESEARCH DESIGN

Research Design is the arrangement of condition for collection and analysis of data in

manner that aims to combine relevance to the research purpose with the economy in procedure.

Research Design is important primarily because of the increased complexity in the market as

well as marketing approaches available to the researchers. A research design specifies the

methods and procedures for conducting a particular study.

4.2 TYPE OF RESEARCH

ANALYTICAL RESEARCH

In this type of research has to use facts or information already available, and analyze

these to make a critical evaluation of the material. The researcher depends on existing data for

his research work. The analysis revolves round the material collected or available.

4.3 SOURCE OF DATA

SECONDARY DATA

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Secondary Data refers to the information or facts already collected such data are collected with

the objectives of understanding the past status of any variable or the data collected and reported

by some source is accessed and used for the objective of a study. Normally in research, the

scholars collect published data, journals, annual reports and websites.

4.4 TOOLS USED FOR ANALYSIS

(1) Ratio Analysis

(2) Comparative Statement Analysis

(3) Common-size Statement Analysis

(4) Cash Flow Statement Analysis

(5) Regression Analysis

4.4.1 RATIO ANALYSIS

A ratio is the process of determining and presenting the relationship of items and groups of items

in the financial statements. The ratios can be classified into the following types:

4.4.1.1 PROFITABILITY RATIO

Profitability Ratio measured as a ability to make maximum profit from optimum utilization of

resources by a business concern is termed as profitability.

o GROSS PROFIT RATIO

This ratio is also known as Gross Margin or Trading Margin Ratio. Gross Profit Ratio includes

the difference between sales and direct costs.

Gross Profit Ratio = ( Gross Profit / Net Sales ) * 100

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o NET PROFIT RATIO

It measures of management efficiency in operating the business successfully from the owner’s

point of view. Higher the ratio better is the operational efficiency of business concern.

Net Profit Ratio = ( Net Profit After Tax / Net Sales ) * 100

o RETURN ON EQUITY OR RETURN ON NET WORTH

This ratio signifies the return on equity shareholders funds. The profit considered for computing

the ratio is taken after payment of preference dividend.

Return on Equity = ( Net Profit After Interest And Tax / Shareholder’s funds ) * 100

4.4.1.2 ACTIVITY RATIO OR TURNOVER RATIOS:

Activity ratios highlight the operational efficiency of the business concern. The term operational

efficiency refers to effective, profitable and rational use of resources available to the concern.

o WORKING CAPITAL TURNOVER RATIO

Working capital ratio measures the effective utilization of working capital. It also measures the

smooth running of business. The ratio establishes relationship between cost of sales and working

capital.

Working Capital Turnover Ratio = ( Sales / Net Working Capital )

o CAPITAL TURNOVER RATIO

Managerial efficiency is also calculated by establishing the relationship between cost of sales or

sales with the amount of capital invested in the business.

Capital Turnover Ratio = (Sales / Capital Employed)

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o FIXED ASSET TURNOVER RATIO

This ratio determines efficiency of utilization of fixed assets and profitability of a business

concern.

Fixed Asset Turnover Ratio = (Sales / Net Fixed asset)

4.4.1.3 SOLVENCY OR FINANCIAL RATIOS

Solvency or Financial Ratios include all ratios which express financial position of the concern.

The term financial position generally refers to short-tem and long-term solvency of the business

concern, including safety of different interested parties.

o CURRENT RATIO

In order to measure the short-term liquidity or solvency of a concern, comparison of current

assets and current liabilities is inevitable. Current ratio indicates the ability of a concern to meet

its current obligations as and when they are due for payment.

Current Ratio = ( Current asset / Current liabilities )

o DEBT EQUITY RATIO

The debt equity ratio is determined to ascertain the soundness of the long term financial policies

of the company and also to measures the relatives’ proposition of outsider’s funds and

shareholders funds investments in the company.

Debt-Equity Ratio = ( Total Long-term Debt / Shareholder’s Funds )

o DEBT TO TOTAL FUNDS RATIO

This ratio gives same indication as the debt equity ratio as this is a variation of debt equity ratio.

This ratio is the relationship between long term debts and total long term funds.

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Debt to Total Funds Ratio = ( Long-term Debt / Total Funds)

o EQUITY TO TOTAL FUNDS

Equity to total funds explains the relationship between equity and total funds.

Equity to Total Funds = ( Equity / Total Funds)

4.4.2 COMPARATIVE STATEMENT ANALYSIS

Comparative balance sheet as on two or more different dates can be used for comparing

assets and liabilities and findings out any increase or decrease in the items. Thus while in single

balance sheet the emphasis is on present position, it is on change in the comparative balance

sheet.

4.4.3 COMMON SIZE STATEMENT ANALYSIS

Common size statements indicate the relationship of various items with some common

items. In the income statements, the sales figure is taken as basis and all other figures are

expressed as percentage of sales. Similarly, in the balance sheet the total assets and liabilities is

taken as base and all other figures are expressed as percentage of this total.

4.4.4 CASH FLOW STATEMENT

Cash flow includes cash inflows and out flows - cash receipts and cash payments during a

period. A cash flow statement is a statement which portrays the changes in the position between

two accounting period. Cash flow analysis can reveal the causes for even highly profitable firms

experiencing acute cash shortages.

4.4.5 REGRESSION ANALYSIS

A fundamental and versatile research technique that seeks to explain an outcome variable

in terms of multiple predictor variables. This analysis reveals the nature and strength of the

relationship between each predictor variable and the outcome, independent of the influence from

all other predictors.

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Regression Equation Y on X is given as:

Y = a + bX

Equations to find constants ‘a’ and ‘b’ are given as:

∑Y = Na + b∑X

∑XY = a∑X + b

CHAPTER - 5

DATA ANALYSIS ANDINTERPRETATION

24

5 DATA ANALYSIS AND INTERPRETATION

5.1 RATIO ANALYSIS

5.1.1 PROFITABILITY RATIOS

5.1.1.1 Gross Profit Ratio: This ratio is also known as Gross Margin or Trading Margin Ratio. Gross Profit Ratio

includes the difference between sales and direct costs.

Gross Profit Gross Profit Ratio = X100 Net Sales

Table No 5.1.1 GROSS PROFIT RATIO

Years Gross Profit(Rs.)

Net sales(Rs.)

Ratio(In %)

2007-2008 30289.71 90176.44 33.58

2008-2009 21971.03 108277.62 20.29

2009-2010 32347.63 118189.37 27.37

Chart No 5.1.1 GROSS PROFIT RATIO

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INFERENCES:

The Gross Profit for the financial year 2007-2008 was recorded as per the ratio is

33.58%, where as the years between 2008-2009 went through a change in the ratio of 20.29%

and the companies profit went upward in 2009-2010 with the ratio of 27.37%. Thus, it is

showing the steady growth in the company profile.

5.1.1.2 NET PROFIT RATIO

It measures of management efficiency in operating the business successfully from the

owner’s point of view. It indicates the return on shareholder’s investment. Higher the ratio better

is the operational efficiency of business concern.

Net Profit after Tax Net Profit Ratio = X 100 Net Sales

Table No 5.1.2 NET PROFIT RATIO

Years Net Profit(Rs.)

Net sales(Rs.)

Ratio (In %)

2007-2008 21254.24 90176.44 23.56

2008-2009 15073.14 108277.62 13.92

2009-2010 22674.86 118189.37 19.18

Chart No 5.1.2 NET PROFIT RATIO

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2007-2008 2008-2009 2009-20100

10

20

30

40

YEARS

RA

TIO

(IN

P

ER

CE

NT

AG

E)

INFERENCES:

The Net Profit Ratio depicts that the company had a good profit in 2007-2008 where it

had a good yield profit. Comparing to the year 2008-2009 is 13.92%, the sales of the company

have a steady attitude and increase upwards to 19.18%. This indicates that there is an

improvement in the operational efficient of the business and it leads to the increase in the

profitability of the firm.

5.1.1.3 RETURN ON EQUITY OR RETURN ON NET WORTH

This ratio signifies the return on equity shareholders funds. The profit considered for computing

the ratio is taken after payment of preference dividend.

Net profit after interest and tax Return on Equity = X 100

Shareholder fund

Table No 5.1.3 RETURN ON EQUITY

Years Net profit after interest and tax

(Rs.)

ShareholderFund (Rs.)

Ratio (In %)

2007-2008 21254.24 231280.81 9.18

2008-2009 15073.14 268538.97 5.61

2009-2010 22674.86 333318.07 6.80

Chart No 5.1.3 RETURN ON EQUITY

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2007-2008 2008-2009 2009-20100

5

10

15

20

25

YEARS

RA

TIO

(IN

P

ER

CE

NT

AG

E)

2007-2008 2008-2009 2009-20100

2

4

6

8

10

YEARS

RA

TIO

(IN

PE

R-

CE

NT

AG

E)

INFERENCES:

Return on shareholder fund determines the profitability from the shareholders point of

view. From the above, it shows that in the year 2008-2009, the company shows 5.61% of ratio

and it has risen to 6.80%. This is a clear indication of overall operation is efficient.

5.1.2 TURNOVER RATIO

5.1.2.1 WORKING CAPITAL TURNOVER RATIO

Working capital ratio measures the effective utilization of working capital. It also

measures the smooth running of business. The ratio establishes relationship between cost of sales

and working capital.

Sales Working Capital Turnover Ratio =

Net Working Capital

Table No 5.1.4 WORKING CAPITAL TURNOVER RATIO

Years Sales(Rs.)

Net Working Capital(Rs.)

Ratio (In Times)

2007-2008 90176.44 645733.44 0.13

2008-2009 108277.62 666319.18 0.16

2009-2010 118189.37 898497.54 0.13

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Chart No 5.1.4 WORKING CAPITAL TURNOVER RATIO

2007-2008 2008-2009 2009-20100

0.05

0.1

0.15

0.2

YEARS

RA

TIO

(IN

TIM

ES

)

INFERENCES:

A higher ratio is the indication of lower investment of working capital and more profit.

In 2007-2008, the sales of the company are low at 0.13 times but in the year 2008-2009, it gone

upward of sales to 0.16 times.

5.1.2.2 CAPITAL TURNOVER RATIO

Managerial efficiency is also calculated by establishing the relationship between

cost of sales or sales with the amount of capital invested in the business.

Sales Capital Turnover Ratio =

Capital Employed

Table No 5.1.5 CAPITAL TURNOVER RATIO

Years Net Sales(Rs.)

Capital Employed(Rs.)

Ratio (In Times)

2007-2008 90176.44 536009.27 0.16

2008-2009 108277.62 533288.26 0.20

2009-2010 118189.37 720052.92 0.17

Chart No 5.1.5 CAPITAL TURNOVER RATIO

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2007-2008 2008-2009 2009-20100

0.05

0.1

0.15

0.2

0.25

YEARS

RA

TIO

(IN

TIM

ES

)

INFERENCES:

In the year 2007-2008, the sales’ comparing to 2008-2009 it is increased to 0.20 times and

it shows that efficient methods are adopted to use the capital employed. In 2009-2010, which

compares to the year 2007-2008 it indicates higher ratio of 0.17 times. The capital of the

company has utilized efficiently comparing to 2007-2008.

5.1.2.3 FIXED ASSET TURNOVER RATIO

This ratio determines efficiency of utilization of fixed assets and profitability of a

business concern.

Sales Fixed Asset Turnover Ratio =

Net Fixed asset

Table No 5.1.6 FIXED ASSET TURNOVER RATIO

Years Sales(Rs.)

Fixed Asset(Rs.)

Ratio (In Times)

2007-2008 90176.44 17264.30 5.22

2008-2009 108277.62 20241.05 5.35

2009-2010 118189.37 23237.80 5.09

Chart No 5.1.6 FIXED ASSET TURNOVER RATIO

30

INFERENCES:

Higher the ratio is more than the efficiency in utilization of Fixed Assets. Lower ratio

indicates the under utilization of fixed assets. From the above table it indicates in the year 2008-

2009, the sales have been increased comparing to the next year 2009-2010. And it’s gradually

declining over the next year 2009-2010 for 5.09 times.

5.1.3 SOLVENCY OR FINANCIAL RATIOS:

5.1.3.1 CURRENT RATIO

In order to measure the short-term liquidity or solvency of a concern, comparison of

current assets and current liabilities is inevitable. Current ratio indicates the ability of a concern

to meet its current obligations as and when they are due for payment.

Current asset Current Ratio = Current liabilities

Table No 5.1.7 CURRENT RATIO

Years Current Asset(Rs.)

Current Liabilities(Rs.)

Ratio (In Times)

2007-2008 56187.53 53034.57 1.06

2008-2009 68876.04 50360.94 1.36

2009-2010 166489.36 55084.13 3.02

31

2007-2008 2008-2009 2009-20104.9

5

5.1

5.2

5.3

5.4

YEARS

RA

TIO

(IN

TIM

ES

)

Chart No 5.1.7 CURRENT RATIO

2007-2008 2008-2009 2009-20100

0.51

1.52

2.53

3.5

YEARS

RA

TIO

(IN

TIM

ES

)

INFERENCES:

A high current ratio is an assurance that the firm will have adequate funds to pays

current liabilities and other payment. During the year 2009-2010, the current ratio is 3.02 times

and it is more when compared with previous year 2008-2009 is 1.36 times.

5.1.3.2 DEBT EQUITY RATIO

The debt equity ratio is determined to ascertain the soundness of the long term

financial policies of the company and also to measures the relatives’ proposition of outsider’s

funds and shareholders funds investments in the company.

Total Long-term debt Debt Equity Ratio =

Shareholders Funds

Table No 5.1.8 DEBT EQUITY RATIO

Years Long term debts(Rs.)

Shareholders funds(Rs.)

Ratio(In Times)

2007-2008 431716.93 104292.34 4.13

2008-2009 418021.26 115267 3.62

2009-2010 588417.27 131635.65 4.47

32

Chart No 5.1.8 DEBT EQUITY RATIO

INFERENCES:

From the above table, during the year 2007-2008 the debt equity ratio is 4.13 times and it is

decreased to 3.62 times then it shows the uptrend from the year 2009-2010 as 4.47 times.

Suggest that the debt from the company has increased over the years with increase in shareholder

funds as well.

5.1.3.3 DEBT TO TOTAL FUNDS RATIO

This ratio gives same indication as the debt equity ratio as this is a variation of debt

equity ratio. This ratio is also known as solvency ratio. This ratio is the relationship between long

term debts and total long term funds.

Long Term Debts Debt to Total Funds Ratio = Total Funds

Table No 5.1.9 DEBT TO TOTAL FUNDS RATIO

Years Long Term Debts(Rs.)

Total Funds(Rs.)

Ratio (In Times)

2007-2008 431716.93 712389.16 0.60

2008-2009 418021.26 742843.84 0.56

2009-2010 588417.27 981013.79 0.59

Chart No 5.1.9 DEBT TO TOTAL FUNDS RATIO

33

2007-2008 2008-2009 2009-20100

1

2

3

4

5

YEARS

RA

TIO

(IN

TIM

ES

)

2007-2008 2008-2009 2009-20100.520.540.560.58

0.60.62

YEARS

RA

TIO

(IN

TIM

ES

)

INFERENCES:

During the year 2007-2008, the debt to total funds ratio is 0.60 times and it was

decreased. And in 2009-2010 again it had an increase in the company’s sales comparing to

previous year 2008-2009 is 0.56 times to 0.59 times in 2009-2010.

5.1.3.4 EQUITY TO TOTAL FUNDS

Equity to total funds explains the relationship between equity and total funds.

Equity Equity to Total Funds = Total Funds

Table No 5.1.10 EQUITY TO TOTAL FUNDS

Years Equity(In Rs.)

Total Funds(In Rs.)

Ratio (In Times)

2007-2008 104292.34 712389.16 0.14

2008-2009 115267.00 742843.84 0.15

2009-2010 131635.65 981013.79 0.13

Chart No 5.1.10 EQUITY TO TOTAL FUNDS

34

2007-2008 2008-2009 2009-20100.12

0.1250.13

0.1350.14

0.1450.15

0.155

YEARS

RA

TIO

(IN

TIM

ES

)

INFERENCES:

In the year 2007-2008, the total funds was Rs.712389.16 (in lakhs) and it shows

upward trend of Rs.981013.79 (in lakhs) and during the year 2009-2010 comparing to the year

2008-2009 is Rs.742843.84 (in lakhs).

Particulars 2009 (Rs.)

2010(Rs.)

Amount Increase / Decrease during 2009-2010 (Rs.)

Percentage Increase / Decrease

during2009-2010 (In %)

35

Income from Operation

Less: Financial Expense

Gross Profit (A)

Other Income:

Profit on Sale of SharesOther Income

Total (B)

Total Income (A+B) = C

Expense:Operating Expense:

Administration ExpenseEstablishment ExpenseProvisionDepreciation

Total Operating Expense (D)

Operating Profit (C-D)

Non-Operating Expense:

Taxation

Total Non-Operating Expense (F)

Net Profit (E-F)

108277.62

64544.09

43733.53

-3199.28

3199.28

46932.81

7160.919407.974616.803776.10

24961.78

21971.03

6897.89

6897.89

15073.14

118189.37

63379.55

54809.82

2538.904142.57

6681.47

61491.29

6042.2710011.238608.594481.57

29143.66

32347.63

9672.77

9672.77

22674.86

+9911.75

(1164.54)

+11076.29

-+943.29

+3482.19

14558.48

(1118.64)+603.26

+3991.79+705.47

+4181.88

+10376.6

+2774.88

+2774.88

+7601.72

+9.15

(1.80)

+25.33

-+29.48

+108.84

+134.17

(15.62)+6.41

+86.46+18.68

+16.75

+47.23

+40.23

+40.23

+50.43

5.2.1 COMPARATIVE INCOME STATEMENT OF SUNDARAM FINANCE LIMITED

FOR THE YEAR ENDED 31.03.2010

INFERENCES:

The comparative income statement shows income from operation amount increase during

the year 2009-2010 was Rs.9911.75 and increase in percentage of 9.15.

36

For the year 2009-2010, the total income indicates Rs.14558.48 and percentage increase

during the year 2009-2010 was 134.17.

The operating profit has been increased is Rs.32347.63 in the year 2010 which is

comparing to the previous year was Rs.21971.03 and the percentage shows increase by 47.23.

The Net profit amount increases during 2009-2010 is Rs. 7601.72 and shows percentage increase by 50.43.

5.2.2 COMPARATIVE BALANCE SHEET OF SUNDARAM FINANCE LIMITED FOR

THE YEAR ENDED 31.03.2010

Particulars2009 2010

(Rs.)

Amount Increase / Decrease during

2009-2010

Percentage Increase /

Decrease during

37

(Rs.) (Rs.) 2009-2010 (In %)

Assets:

Current AssetsLoans & AdvanceDeferred Tax AssetInvestmentFixed Asset

Total Asset

Liabilities and Capital:

Current Liability Unsecured LoanSecured Loan

Total Liabilities (A)

Capital and Reserve:

Share Capital Reserve & Stock Options

Total Shareholders Funds (B)

Total Liabilities and Capital (A+B)

68876.04653955.77

5691.3651188.8720241.05

799953.09

58478.77208479.20417728.12

684686.09

5555.19

109711.81

115267.00

799953.09==========

166489.36799363.96

6124.4053744.8023237.80

1048960.32

67946.53260960.87588417.27

917324.67

5555.19

126080.46

131635.65

1048960.32==========

+97613.32+145408.19

+433.04+2555.93+2996.75

+249007.23

+9467.76+52481.67

+170689.15

+232638.58

-

+16368.65

16368.65

249007.23=============

+141.72+21.98+7.61+4.99

+14.80

+31.13

+16.19+25.17+40.86

+33.98

-

+14.92

+14.20

+31.13=============

INFERENCES:

In the year 2009-2010, the investment it shows the uptrend for the year 2010 as

Rs.53744.80 and it has increased by 4.99%.

38

Fixed assets has been increased was Rs.23237.80 in the year 2010 which is comparing to

the previous year and the percentage shows increase by 14.80.

During the year 2009, the shareholders fund amount to Rs.115267.00 it has been increased

to the amount of Rs. 131635.65 and percentage increased was 14.20.

Secured loans shows uptrend by Rs.588417.27 over the previous year of Rs.417728.12 and

increase in percentage of 33.98.

5.3.1 COMMON SIZE INCOME STATEMENT OF SUNDARAM FINANCE LIMITED FOR THE YEAR ENDED 31.03.2009

Particulars2008 2009

Amount(Rs.)

Percentage (%)

Amount(Rs.)

Percentage (%)

39

Income from Operation

Less: Financial Expense

Gross Profit (A)

Other Income:

Profit on Sale of SharesOther Income

Total (B)

Total Income (A+B) = C

Expense:Operating Expense:

Administration ExpenseEstablishment ExpenseProvisionDepreciation

Total Operating Expense (D)

Operating Profit (C-D) = E

Non-Operating Expense:

Taxation

Total Non-Operating Expense (F)

Net Profit (E-F)

90176.44

49699.52

40476.92

-3199.28

3199.28

43676.20

7198.818821.903308.023012.19

22340.92

21335.28

9035.47

9035.47

12299.81

100

55.1

44.88

-

3.54

3.54

48.43

7.989.783.663.34

24.77

23.65

10.01

10.01

13.63

108277.62

64544.09

43733.53

-3199.28

3199.28

46932.81

7160.919407.974616.803776.10

24961.78

21971.03

6897.89

6897.89

15073.14

100

59.6

40.39

-2.95

2.95

43.34

6.618.684.263.48

23.05

20.29

6.37

6.37

13.92

INFERENCES:

The operating profit of the Sundaram Finance Limited has been increased during the

year 2008-2009, the operating profit shows Rs.21335.28 in 2008 and Rs.21971.03 in the

financial year 2009.

40

For the year 2008, the establishment expense shows Rs.8821.90 and it has been

increased to Rs.9408.97 during the year 2009.

In 2008, provision is 3.66% and it indicates increase during the year 2009 was 4.26%.

The operating expenses incurred to the Sundaram Finance Limited during the financial

year 2008 which shows Rs.22340.92 and it has risen to Rs.24961.78 during the financial year

2009.

The net profit percentage recorded as 13.63 in 2008 where as in the year 2009 the

companies profit went upward with the percentage of 13.92.

5.3.2 COMMON SIZE BALANCE SHEET OF SUNDARAM FINANCE LIMITED FOR

THE YEAR ENDED 31.03.2009

Particulars

2008 2009

Amount Percentage Amount Percentage

41

(Rs.) (%) (Rs.) (%)Assets:

Current AssetsLoans & AdvanceDeferred Tax AssetInvestmentFixed Asset

Total Asset

Liabilities and Capital:

Current Liability Unsecured LoanSecured Loan

Total Liability (A)

Capital and Reserve:

Share Capital Reserve & Stock Options

Total Shareholders Funds (B)

Total Liabilities and Capital (A+B)

56187.53652655.00

4263.6745645.5017264.30

776016.00

63626.84176379.89431716.93

671723.66

2777.60

101514.74

104292.34

776016.00==========

7.2484.100.545.882.22

100===========

8.1922.7255.63

86.56

0.35

13.08

13.43

100===========

68876.04653955.77

5691.3651188.8720241.05

799953.09

58478.77208479.20417728.12

684686.09

5555.19

109711.81

115267.00

799953.09============

8.6181.740.716.392.53

100=============

7.3126.0652.21

85.59

0.69

13.71

14.40

100=============

INFERENCES:

The current assets have increased during the financial year 2009 is 8.61% which is

comparing to 2008 was 7.24% of the Sundaram Finance Limited.

42

There was an increase in fixed assets of Rs.20241.05 comparing to the year 2009. Higher

the ratio is more than the efficiency in utilization of fixed assets.

The current liabilities have been decreased to 7.31% of the total liabilities of the

Sundaram finance Limited during the year 2009. The current liability was 8.91% of the total

liabilities during the year 2008.

Reserves and stock options has been increased was in the year 2009 which is

Rs.109711.81 comparing to the previous year and the percentage shows increase by 13.71%.

During the year 2008-2009, the shareholders fund amount to Rs.104292.34, it has been

increased to the amount of Rs.115267 and the percentage increased was 14.40% in 2009.

5.4 CASH FLOW STATEMENT OF SUNDARAM FINANCE LIMITED FOR THE YEAR ENDED 31.3.2010

Particulars 2009-2010(In Rs.)

43

(A)CASH FLOW FROM OPERATING ACTIVITIES

Net ProfitAdd: Lease Equalization AccountProvision for Taxation (Including Wealth Tax)

Add: Financial ExpensesDepreciationProvision against InvestmentsProvision against Non - Performing assetsGeneral Provisions on Standard AssetsEmployee Stock Option Compensation Expenses(Profit) loss on sale of assets(Profit) loss on sale of InvestmentsInterest / Dividend IncomeEffect of Foreign Exchange rates on Cash and Cash Equivalents, netOPERATING PROFIT BEFORE WORKING CAPITAL CHANGESIncrease in Net Stock on hireDecrease in Leased assets - net of salesIncrease in Trade Bills purchasedDecrease in Net Investment in LeaseDecrease in Loans and AdvancesIncrease in Other ReceivablesDecrease in Bank Deposits (net)Decrease in SLR Investments - net of salesIncrease in Current LiabilitiesCash generated from OperationsFinancial ExpensesDirect Taxes Paid

NET CASH FROM OPERATING ACTIVITIES (A)

B) CASH FLOW FROM INVESTING ACTIVITIESPurchase of Fixed AssetsSale of Fixed AssetsPurchase of InvestmentsPurchase of Investments in Subsidiaries/Joint VentureSale of InvestmentsInterest ReceivedDividend ReceivedNET CASH FROM INVESTING ACTIVITIES (B)

C) CASH FLOW FROM FINANCING ACTIVITIESProceeds from Issue of DebenturesDebentures RedeemedIncrease (Decrease) in Long Term Borrowings

226,74.86 (91.85) 96,72.77322,55.78633,79.55

67,08.38 (60,87.57) 15,44.60 (32.25)

(1465,04.17) 13.29

(1079,89.81) (22,40.77) 32,87.01

(619,43.37) (90,05.16)

956,35.33 45,80.23 1,44.64 4,79.98

31,61.69 23.28 34.21

(53,36.95) (22,00.38)

0.18

965,22.21

(709,48.53)

(2257,27.61)

(15,38.40) 96.09

(12677,85.28) (18,33.50)

12746,00.34 2.75

21,97.65 57,39.65

3475,75.18(2686,00.00) 869,13.98

44

Increase (Decrease) in Fixed DepositsIncrease (Decrease) in Short Term Loans and AdvancesDividend paid (including Corporate Dividend Tax)NET CASH FROM FINANCING ACTIVITIES (C)

D) Effect of Foreign Exchange rates on Cash and Cash Equivalents, net (D)

NET INCREASE IN CASH AND CASH EQUIVALENTS (A)+(B)+(C)+(D)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR

COMPONENTS OF CASH AND CASH EQUIVALENTSAT THE END OF THE YEAR

Current Account with BanksCash, Stamps and Stamp Papers on Hand

154,84.84 417,96.83 (53,51.34)2178,19.49

(0.18)

(21,68.65)

48,39.35

26,70.70

13,50.13 13,20.5726,70.70

INFERENCES:

In the year 2009-2010, the operating profit before working capital changes show the

profit amount of Rs.96522.

45

The employee stock option compensation expenses of the Sundaram finance Limited

has shown 31,61.69 (Rs. in lakhs) during the year 2009-2010.

While the Net Cash from investing activities depicts Rs.5739.65 in the year 2009-2010.

There was a increase in net stock on hire during the financial year 2009-2010 of

67,08.38 (Rs. in lakhs).

The financial year 2009-2010 depicts the Net cash from financing activities amount of

Rs.217819.49 shows upward profit in the company.

Cash and cash equivalents at the end of the year were Rs.4839.35 it shows that the

company position in the year 2009-2010.

5.5 REGRESSION ANALYSIS FOR SALES

Year XSales

Rs( in Lakhs )

XY X2

46

Y2008 ─1 90176.44 ─ 90176.44 1

2009 0 108277.62 0 0

2010 1 118189.37 118189.37 1

Total ∑x = 0 ∑y= 316643.43 ∑x y= 28012.93 ∑ X2 =2

∑ Y = N a + b ∑ X

∑ XY = a ∑ X + b ∑ X2

Y = a + b X

3 a + 0 b = 316643.43 --------------- ( 1 )

0 a + 2 b = 28012.93 --------------- ( 2 )

Solving ( 1 ) and ( 2 ) We get,

a = 105547.81

b = 14006.46

When X = 2, Y2011 = 105547.81 + 14006.46( 2 )

Y2011 = Rs. 133560.73 ( in Lakhs )

When X = 3, Y2012 = 105547.81 + 14006.46( 3 )

Y2012 = Rs. 147567.19 ( in Lakhs )

INFERENCE:

47

The net sales during the year 2008 were 90176.44 (Rs. in Lakhs) which has been

increased to 108277.62 (Rs. in Lakhs) during 2009 which also raised to 118189.37 (Rs. in

Lakhs) during 2010.

The projection is made for the fore coming years 2011 and 2012 where the net sales

would be 133560.73 (Rs. in Lakhs) during the year 2011 and the net sales during the financial

year 2012 will be 147567.19 (Rs. in Lakhs).

48

CHAPTER - 6

CONCLUSION

ANDSUGGESTIONS

6 SUMMARY AND CONCLUSION

49

6.1 FINIDNGS

The Gross Profit Ratio shows that increasing in sales has maintained the companies profit

level. In the year 2008-2009, the percentage shows 20.29 it has been increased during the

year 2009-2010 to 27.37.

The net profit ratio has been increased to 19.18 during the financial year 2009 – 2010 to

13.92 during 2008 – 2009 which indicates that there is an improvement in the operational

efficient of the business and it leads to the increase in the profitability of the firm.

It has found that the return on equity during the year 2008-2009, the company shows

5.61% of ratio and it has risen to 6.80%. This is a clear indication of overall operation is

efficient.

The Working capital in the year 2008-2009, the sales of the company is low at

Rs.666319.18 and it is increased to Rs.898497.54 in 2009-2010. It measures the effective

utilization of working capital.

The capital turnover of capital employed in the financial year 2008-2009 it shows

Rs.533288.26 and during the year 2009-2010 it is increased to Rs.720052.92. It has

effective utilization of capital employed under the current year.

Fixed asset turnover shows increase in sales of Rs.118189.37 comparing to the previous

year of Rs. 108277.62 and the firm should maintain this increasing trend in future also.

During the year 2009-2010, the current ratio is 3.02% and it is more when compared with

previous year 2008-2009 is 1.36 %. So the short term liquidity of a concern, comparison

of current assets and current liabilities is inevitable.

50

The debt equity ratio has shows 3.62% in 2008-2009 and it has been raised to 4.47%

during 2009-2010 which indicates that the company has increased over the years with

increase in shareholder funds as well.

It is found that the shareholders funds had increased by Rs.16368.65 over the percentage

of 14.20 in comparative income statement analysis. It determines the profitability from

the shareholders point of view.

The financial year 2009-2010 depicts the Net Cash from financing activities amount of

Rs.217819.49 shows upward profit in the company.

51

6.2 SUGGESTIONS

The current ratio is improving rapidly so the company wants to keep an eye on the

current assets flow. The company has been suggested to reduce the expenditure as it increases

every year. Decrease in expenses will increase the profitability.

By over viewing the working capital turnover ratio it is clear that the company

wants to utilize its working capital efficiently that is the excess current assets should be adjusted

according to current scenario. Though the net profit shows it is increased but we found that the

net profit ratio has been decreased. So the company should consider increasing the sales in turn

to increase the actual profit.

The debt equity ratio of the company is also increasing. The company should focus

on the debt and long term funds which are utilized in the company. The excess cash flow should

or can be utilized in any new ventures if the company wishes to do.

52

6.3 CONCLUSION

In the study of Financial Performance of Sundaram Finance Limited Chennai, it is

clear that the company’s financial performance is satisfactory. The company has stable growth

and it shows a greater efficiency in all the areas it works.

If the company utilizes its working capital then the company can go heights which it

wanted to achieve. The comparative income statement shows increase in the current year of net

profit and it depict the companies current profit position. To improve the efficiency the company

will strive for better performance and increase the market share the company.

The suggestions provided through the study will help the company to improve the

operational performance efficiently. The suggestions provided through the study will help the

company to improve the operational performance efficiently.

53

REFERENCES

54

REFERENCES

Carlos Correia, David Flynn, Enrico Uliana & Michael Wormald, “Financial

Management”, 6th Edition, 5.1 -5.34.

Chidambaram Rameshkumar, Anbumani N, “An overview on financial statements and

ratio analysis”,2006, Vol.1, p. 30

George Foster, “Financial Statement Analysis”, 2nd Edition, 57 – 94.

Greninger et al.(1996), Fundamentals of Financial Management, 5th Edition, 4.1-4.18.

Jae K.Shim, Joel G.Siegel, Schaum’s Outline of Theory and Problems of Financial

Accounting, 1999, 279-298.

John J.Wild, K.R.Subramanyam & Robert F.Halsey (2006), Financial Statement

Analysis, 9th Edition, 2-90.

Jonas Elmerraji, “Analyze Investments Quickly with ratios”, 2005, 33-36

Kennedy and Muller, “Analysis of Financial Statements”,1999, 1.3 – 1.34

Khan M Y & Jain P K, “Financial Management”, 4th Edition , 2006, 6.1 - 6.81

Pandey I M, “A Management Guide for Managing Company’s Funds and Profits”, 6th

Edition, 1 – 58

Peeler J. Patsula, “Successful Business Analysis”,2006, 18-19

Rachchh Minaxi A (2011), Introduction to Management Accounting, 3-88.

55

Reddy T S & Hari Prasad Reddy Y, “Management Accounting”, 3rd Edition, 2008, 3.9 -

3.25

Salmi, T. and T. Martikainen (1994), "A review of the theoretical and empirical basis of

financial ratio analysis", The Finnish Journal of Business Economics 43:4, 426-448.

Susan ward, “Financial Ratio Analysis For Performance Check”, p.132

Websites:

www.google.com

www.sundaramfinance.in

http://scholar.google.com

www.managementparadise.com

56

APPENDICES

57